The new Telephone Consumer Protection Act (TCPA) exemption for calls made to cellular numbers to collect debts owed to or guaranteed by the United States applies retroactively to calls made before the exemption's effective date, a federal court in California has ruled. 

The exemption was created by an amendment to the TCPA included in the Bipartisan Budget Act of 2015 (the Act), which was effective as of November 2, 2015. Prior to the amendment, calls to collect government debts would have been prohibited absent the recipient's prior express consent if placed to a cellular telephone and if made by an automatic telephone dialing system (ATDS) or included an artificial or prerecorded voice message. As amended, the TCPA no longer requires such consent for calls "made solely pursuant to the collection of a debt owed to or guaranteed by the United States." (The Act also included a TCPA exemption for such calls made to residential telephone numbers.) The Act mandated that the Federal Communications Communication (FCC) prescribe implementing regulations within nine months of the date of enactment. The FCC has not yet issued proposed regulations.

In Silver v. Pennsylvania Higher Education Assistance Agency, the plaintiff alleged that in January 2014, the defendant made calls to his cell phone using an ATDS to collect his federally funded student loans. He claimed that such calls violated the TCPA because they were made without his consent. In his putative class action complaint filed in February 2014, the plaintiff sought to represent all persons who received cell phone calls from the defendant using an ATDS called by the defendants during the preceding four years.

In its motion for summary judgment filed in December 2015, the defendant argued that the Act applied retroactively to bar the plaintiff's TCPA claim. The court rejected the plaintiff's argument that the TCPA amendment was not effective because the FCC had not yet issued implementing regulations. Finding the amendment to be silent on retroactivity, the court looked to U.S. Supreme Court precedent for the relevant test to determine whether a statute that is silent on retroactivity has retroactive effect. According to the District Court, that test required it to consider whether retroactivity would increase a party's liability for past conduct, "impair rights a party possessed when he acted," or impose new duties on completed transactions. 

In granting summary judgment in the defendant's favor, the court found that none of the test's three conditions were met. It found that rather than increasing a party's liability for past conduct, the amendment decreased such liability by creating a new TCPA exception. With regard to impairment of rights, the court found that "merely impairing the ability to bring a lawsuit" does not provide a sufficient basis to bar retroactive application. Finally, the court found that rather than imposing new duties on completed transactions, the amendment "eliminates certain duties with respect to completed transactions."

Having ruled that the amendment applied retroactively, the court did not reach the defendant's other arguments that the calls were not placed with an ATDS as defined by the TCPA and that the plaintiff had given prior express consent for the calls. 

Ballard Spahr’s TCPA Task Force assists clients in navigating the complex and challenging issues that arise under the TCPA. The Task Force, which comprises regulatory attorneys and litigators, provides counsel on TCPA compliance and avoiding TCPA liability, including reviewing policies and practices and helping to design mobile text message and prerecorded and autodialed call campaigns. It also assists clients in handling scrutiny from regulators, including preparing for examinations, responding to investigations, and defending against enforcement actions. Task Force members also defend clients against TCPA class or individual actions.

Ballard Spahr's Consumer Financial Services Group is nationally recognized for its guidance in structuring and documenting new consumer financial services products, experience with the full range of federal and state consumer credit laws, and skill in litigation defense and avoidance (including pioneering work in pre-dispute arbitration programs).


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